Comments on James Mill,Éléments D’économie Politique

Written: in the first half of 1844;First published: in full in Marx/Engels, Gesamtausgabe, Erste Abteilung, Band 3, Berlin, 1932;First English Translation: by Clemens Dutt for the Collected
Works.
Marx used a translation of Mill’s book, by J. T. Parisot, Paris, 1823.

Marx kept a wide variety of notebooks throughout his life. He often used them to aid in his study of other authors. A common practice was to transcribe long sections from a particular book, and then comment on those sections at some length.

During his time in Paris, Marx kept nine notebooks – largely dedicated to his growing interest in economics. They date from the end of 1843 to January 1845.

The “Paris Notebooks” deal with books by J. B. Say, Adam Smith, David Ricardo, McCulloch, James Mill, Destott de Tracy, Sismondi, Jeremy Bentham, Boisguillebert, Lauderdale, Schütz, List, Skarbek and Buret. Most of Marx's accompanying commentary on these authors is very fragmentary;
and, ideas are often restated far more clearly in the Economic and Philosophic Manuscripts (1844).

The exception to this is the material addressing James Mill's book, Elements of Political Economy (London, 1821). Marx used an 1823 French translation of Mill's book. The Mill part of the Paris Notebooks is quite lengthy – it starts on page 25 of the fourth
notebook and continues into the fifth.

Following a lengthy selection of Mill excerpts, Marx suddenly “veered off” and began developing a larger, tangential thought. After writing his thoughts out, Marx returned to more Mill transcription. Soon, a second digression followed. Upon its completion, Marx finished up his summarizing. (Only the middle three parts of this Mill section of the Paris Notebooks are presented below – in other words, most of the opening and all of closing Mill transcriptions are omitted).

This document is very close in nature to the Economic and Philosophic Manuscripts. Some have suggested that the ideas contained herein might be a glimpse into the missing bulk of the EPM second manuscript.

“... A medium of exchange... is some one commodity, which, in order
to effect an exchange between two other commodities, is first received
in exchange for the one, and is then given in exchange for the other.”
(p. 93) Gold, silver, money.

“By value of money, is here to be understood the proportion
in which it exchanges for other commodities, or the quantity of it which
exchanges for a certain quantity of other things.”

“This proportion is determined by the total amount of money existing in a given country.” (P. 95)

“What regulates the quantity of money?”

“Money is made under two sets of circumstances: Government either
leaves the increase or diminution of it free; or it controls the quantity,
making it greater or smaller as it pleases.

“When the increase or diminution of money is left free, government
opens the mint to the public, making bullion into money for an many as
require it. Individuals possessed of bullion will desire to convert it
into money only when it is their interest to do so; that is, when their
bullion, converted into money, will be more valuable than in its original
form. This can only happen when money is peculiarly valuable, and when
the same quantity of metal, in the state of coin, will exchange for a greater
quantity of other articles than in the state of bullion. As the value of
money depends upon the quantity of it, it has a greater value when it is
in short supply. It is then that bullion is made into coin. But precisely
because of this conversion, the old ratio is restored. Therefore, if the
value of money rises above that of the metal of which it is made, the interest
of individuals operates immediately, in a state of freedom, to restore
the balance by augmenting the quantity of money.” (Pp. 99-101)

“Whenever the coining of money, therefore, is free, its quantity
is regulated by the value of the metal, it being the interest of individuals
to increase or diminish the quantity, in proportion as the value of the
metal in coins is greater or less than its value in bullion.

“But is the quantity of money is determined by the value
of the metal, it is still necessary to inquire what it is which determines
the value of the metal ... Gold and silver are in reality commodities. They
are commodities for the attaining of which labour and capital must be employed.
It is cost of production, therefore, which determines the value of these,
as of other ordinary productions.” (P. 101)

In the compensation
of money and value of metal, as in his description of the cost of production
as the only factor in determining value, Mill commits the mistake – like
the school of Ricardo in general – of stating the abstract law
without the change or continual supersession of this law through which
alone it comes into being. If it is a constant law that, for example,
the cost of production in the last instance – or rather when demand and
supply are in equilibrium which occurs sporadically, fortuitously – determines
the price (value), it is just as much a constant law that they are
not in equilibrium, and that therefore value and cost of production stand
in no necessary relationship. Indeed, there is always only a momentary
equilibrium of demand and supply owing to the previous fluctuation of demand
and supply, owing to the disproportion between cost of production and exchange-value,
just as this fluctuation and this disproportion likewise again follow the
momentary state of equilibrium. This real movement, of which that
law is only an abstract, fortuitous and one-sided factor, is made by recent
political economy into something accidental and inessential. Why? Because
in the acute and precise formulas to which they reduce political economy,
the basic formula, if they wished to express that movement abstractly,
would have to be: In political economy, law is determined by its opposite,
absence of law. The true law of political economy is chance, from
whose movement we, the scientific men, isolate certain factors arbitrarily
in the form of laws.

Mill very well expresses the essence of the matter in the form
of a concept by characterising money as the medium of exchange.
The essence of money is not, in the first place, that property is alienated
in it, but that the mediating activity or movement, the human,
social act by which man's products mutually complement one another, is
estranged from man and becomes the attribute of money, a material
thing outside man. Since man alienates this mediating activity itself,
he is active here only as a man who has lost himself and is dehumanised;
the relation itself between things, man's operation with them, becomes
the operation of an entity outside man and above man. Owing to this alien
mediator – instead of man himself being the mediator for man – man
regards his will, his activity and his relation to other men as a power
independent of him and them. His slavery, therefore, reaches its peak.
It is clear that this mediator now becomes a real God, for
the mediator is the real power over what it mediates to me. Its
cult becomes an end in itself. Objects separated from this mediator have
lost their value. Hence the objects only have value insofar as they represent
the mediator, whereas originally it seemed that the mediator had value
only insofar as it represented them. This reversal of the
original relationship is inevitable. This mediator is therefore
the lost, estranged essence of private property, private property
which has become alienated, external to itself, just as it is the
alienated species-activity of man, the externalised mediation
between man's production and man's production. All the qualities which
arise in the course of this activity are, therefore, transferred to this
mediator. Hence man becomes the poorer as man, i.e., separated from this
mediator, the richer this mediator becomes.

Christ represents originally: 1) men before God; 2) God
for men; 3) men to man.

But Christ is alienated God and alienated man. God
has value only insofar as he represents Christ, and man has value only
insofar as he represents Christ. It is the same with money.

Why must private property develop into the money system?
Because man as a social being must proceed to exchange
and
because exchange – private property being presupposed – must evolve value.
The mediating process between men engaged in exchange is not a social or
human process, not human relationship; it is the abstract relationship
of private property to private property, and the expression of this abstract
relationship is value, whose actual existence as value constitutes
money. Since men engaged in exchange do not relate to each other
as men, things lose the significance of human, personal property.
The social relationship of private property to private property is already
a relationship in which private property is estranged from itself. The
form of existence for itself of this relationship, money, is therefore
the alienation of private property, the abstraction from its specific,
personal nature.

Hence the opposition of modern political economy to the monetary
system, the système monétaire[1],
cannot achieve any decisive victory in spite of all its cleverness. For
if the crude economic superstition of the people and governments clings
to the sensuous, tangible, conspicuous money-bag, and therefore
believes both in the absolute value of the precious metals and possession
of them as the sole reality of wealth – and if then the enlightened, worldly-wise
economist comes forward and proves to them that money is a commodity like
any other, the value of which, like that of any other commodity, depends
therefore on the relation of the cost of production to demand, competition,
and supply, to the quantity or competition of the other commodities –
this economist is given the correct reply that nevertheless the real
value of things is their exchange-value and this in the last instance
exists in money, as the latter does in the precious metals, and that consequently
money represents the true value of things and for that reason money is
the most desirable thing. Indeed, in the last instance the economist's
theory itself amounts to this wisdom, the only difference being that he
possesses the capacity of abstraction, the capacity to recognise the existence
of money under all forms of commodities and therefore not to believe in
the exclusive value of its official metallic mode of existence. The metallic
existence of money is only the official palpable expression of the soul
of money, which is present in all branches of production and in all activities
of bourgeois society.

The opposition of modern economists to the monetary system is
merely that they have conceived the essence of money in its abstract
universality and are therefore enlightened about the sensuous superstition
which believes in the exclusive existence of this essence in precious metal.
They substitute refined superstition for crude superstition. Since, however,
in essence both have the same root, the enlightened form of the superstition
cannot succeed in supplanting completely the crude sensuous form, because
the former does not attack the essence of the latter but only the particular
form of this essence.

The personal mode of existence of money as money – and
not only as the inner, implicit, hidden social relationship or class
relationship between commodities – this mode of existence corresponds
the more to the essence of money, the more abstract it is, the less it
has a natural relationship to the other commodities, the more it
appears as the product and yet as the non-product of man, the less primitive
its sphere of existence, the more it is created by man or, in economic
terms, the greater the inverse relationship of its value as money
to the exchange-value or money value of the material in which it exists.
Hence paper money and the whole number of paper representatives
of money (such as bills of exchange, mandates, promissory notes, etc.)
are the more perfect mode of existence of money as money
and a necessary factor in the progressive development of the money system.
In the credit system, of which banking is the perfect expression,
it appears as if the power of the alien, material force were broken, the
relationship of self-estrangement abolished and man had once more human
relations to man. The Saint-Simonists, deceived by this appearance,
regarded the development of money, bills of exchange, paper money, paper
representatives of money, credit, banking, as a gradual abolition
of the separation of man from things, of capital from labour, of private
property from money and of money from man, and of the separation of man
from man. An organised banking system is therefore their ideal.
But this abolition of
estrangement, this return of man to himself and therefore to other men is only an appearance;
the self-estrangement, the dehumanisation, is all the more infamous
and extreme because its element is no longer commodity, metal, paper,
but man's moral existence, man's social existence, the inmost
depths of his heart, and because under the appearance of man's trust
in man it is the height of distrust and complete estrangement. What
constitutes the essence of credit? We leave entirely out of account
here the content of credit, which is again money. We leave out of
account, therefore, the content of this trust in accordance with
which a man recognises another man by advancing him a certain quantity
of value and – at best, namely, when he does not demand payment for the
credit, i.e., he is not a usurer showing his trust in his fellow man not
being a swindler, but a “good” man. By a “good” man, the one who bestows
his trust understands, like Shylock, a man who is “able to pay.”

Credit is conceivable in two relationships and under two different
conditions. The two relationships are: first, a rich man gives credit to
a poor man whom he considers industrious and decent. This kind of credit
belongs to the romantic, sentimental part of political economy, to its
aberrations, excesses, exceptions, not to the rule. But even
assuming this exception and granting this romantic possibility, the life
of the poor man and his talents and activity serve the rich man as a guarantee
of the repayment of the money lent. That means, therefore, that all the
social virtues of the poor man, the content of his vital activity, his
existence itself, represent for the rich man the reimbursement of his capital
with the customary interest. Hence the death of the poor man is the worst
eventuality for the creditor. It is the death of his capital together with
the interest. One ought to consider how vile it is to estimate the
value of a man in money, as happens in the credit relationship.
As a matter of course, the creditor possesses, besides moral guarantees,
also the guarantee of legal compulsion and still other more or less
real guarantees for his man. If the man to whom credit is given
is himself a man of means, credit becomes merely a medium
facilitating exchange, that is to say, money itself is raised to
a completely ideal form. Credit is the economic judgment
on the morality of a man. In credit, the man himself, instead
of metal or paper, has become the mediator of exchange, not however
as a man, but as the mode of existence of capital and interest.
The medium of exchange, therefore, has certainly returned out of its material
form and been put back in man, but only because the man himself has been
put outside himself and has himself assumed a material form. Within the
credit relationship, it is not the case that money is transcended in man,
but that man himself is turned into money, or money is incorporated
in him. Human individuality, human morality itself, has become
both an object of commerce and the material in which money exists. Instead
of money, or paper, it is my own personal existence, my flesh and blood,
my social virtue and importance, which constitutes the material, corporeal
form of the spirit of money. Credit no longer resolves the value
of money into money but into human flesh and the human heart. Such is the
extent to which all progress and all inconsistencies within a false system
are extreme retrogression and the extreme consequence of vileness.

Within the credit system, its nature, estranged from man, under
the appearance of an extreme economic appreciation of man, operates in
a double way:

1) The antithesis between capitalist and worker, between big and
small capitalists, becomes still greater since credit is given only to
him who already has, and is a new opportunity of accumulation for the rich
man, or since the poor man finds that the arbitrary discretion of the rich
man and the latter's judgment over him confirm or deny his entire
existence and that his existence is wholly dependent on this contingency.

2) Mutual dissimulation, hypocrisy and sanctimoniousness are carried
to extreme lengths, so that on the man without credit is pronounced not
only the simple judgment that he is poor, but in addition a pejorative
moral judgment that he possesses no trust, no recognition, and therefore
is a social pariah, a bad man, and in addition to his privation, the poor
man undergoes this humiliation and the humiliating necessity of having
to ask the rich man for credit.

3) Since, owing to this completely nominal
existence of money, counterfeiting cannot be undertaken by man in
any other material than his own person, he has to make himself into counterfeit
coin, obtain credit by stealth, by lying, etc., and this credit relationship
– both on the part of the man who trusts and of the man who needs trust
– becomes an object of commerce, an object of mutual deception and misuse.
Here it is also glaringly evident that distrust is the basis of
economic trust; distrustful calculation whether credit ought to be given
or not; spying into the secrets of the private life, etc., of the one seeking
credit; the disclosure of temporary straits in order to overthrow a rival
by a sudden shattering of his credit, etc. The whole system of bankruptcy,
spurious enterprises, etc.... As regards government loans, the state
occupies exactly the same place as the man does in the earlier example....
In the game with government securities it is seen how the state has become
the plaything of businessmen, etc.

4) The credit system finally has its completion in the
banking system. The creation of bankers, the political domination
of the bank, the concentration of wealth in these hands, this economic
Areopagus of the nation, is the worthy completion of the money system.

Owing to the fact that in the credit system the moral recognition
of a man, as also trust in the state, etc., take the form of
credit, the secret contained in the lie of moral recognition, the
immoral vileness of this morality, as also the sanctimoniousness
and egoism of that trust in the state, become evident and show themselves
for what they really are.

Exchange, both of human activity within production itself
and of human product against one another, is equivalent to species-activity
and species-spirit, the real, conscious and true mode of existence of which
is social activity and social enjoyment. Since human
nature is the true community of men, by manifesting their nature
men create, produce, the human community, the social entity,
which is no abstract universal power opposed to the single individual,
but is the essential nature of each individual, his own activity, his own
life, his own spirit, his own wealth. Hence this true community
does not come into being through reflection, it appears owing to the need
and egoism of individuals, i.e., it is produced directly by their
life activity itself. It does not depend on man whether this community
exists or not; but as long as man does not recognise himself as man, and
therefore has not organised the world in a human way, this community
appears in the form of estrangement, because its subject,
man, is a being estranged from himself. Men, not as an abstraction, but
as real, living, particular individuals, are this entity. Hence,
as they are, so is this entity itself. To say that man is
estranged from himself, therefore, is the same thing as saying that the
society of this estranged man is a caricature of his real community,
of his true species-life, that his activity therefore appears to him as
a torment, his own creation as an alien power, his wealth as poverty, the
essential bond linking him with other men as an unessential bond,
and separation from his fellow men, on the other hand, as his true mode
of existence, his life as a sacrifice of his life, the realisation of his
nature as making his life unreal, his production as the production of his
nullity, his power over an object as the power of the object over him,
and he himself, the lord of his creation, as the servant of this creation.

The community of men, or the manifestation of the nature
of men, their mutual complementing the result of which is species-life,
truly human life – this community is conceived by political economy in
the form of exchange and trade. Society, says Destutt de
Tracy, is a series of mutual exchanges. It is precisely this process
of mutual integration. Society, says Adam Smith, is a commercial
society. Each of its members is a merchant.

It is seen that political economy defines the estranged
form of social intercourse as the essential and original
form corresponding to man's nature.

Political economy – like the real process – starts
out from the relation of man to man as that of property owner
to property owner. If man is presupposed as property owner,
i.e., therefore as an exclusive owner, who proves his personality and both
distinguishes himself from, and enters into relations with, other men through
this exclusive ownership – private property is his personal, distinctive,
and therefore essential mode of existence – then the loss or surrender
of private property is an alienation of man, as it is of private
property, itself. Here we shall only be concerned with the latter definition.
If I give up my private property to someone else, it ceases to be mine;
it becomes something independent of me, lying outside my sphere,
a thing external to me. Hence I alienate my private property.
With regard to me, therefore, I turn it into alienated private property.
But I only turn it into an alienated thing in general, I abolish
only my personal relation to it, I give it back to the elementary
powers of nature if I alienate it only with regard to myself. It becomes
alienated private property only if, while ceasing to be my
private property, it on that account does not cease to be private property
as such, that is to say, if it enters into the same relation to another
man, apart from me, as that which it had to myself; in short, if
it becomes the private property of another man. The case
of violence excepted – what causes me to alienate my private
property to another man? Political economy replies correctly: necessity,
need. The other man is also a property owner, but he is the owner of
another thing, which I lack and cannot and will not do without,
which seems to me a necessity for the completion of my existence
and the realisation of my nature.

The bond which connects the two property owners with each other
is the specific kind of object that constitutes the substance of
their private property. The desire for these two objects, i.e., the need
for them, shows each of the property owners, and makes him conscious of
it, that he has yet another essential relation to objects besides
that of private ownership, that he is not the particular being that he
considers himself to be, but a total being whose needs stand in
the relationship of inner ownership to all products, including those
of another's labour. For the need of a thing is the most evident, irrefutable
proof that the thing belongs to my essence, that its being is for
me, that its property is the property, the peculiarity, of my essence.
Thus both property owners are impelled to give up their private property,
but to do so in such a way that at the same time they confirm private ownership,
or to give up the private property within that relationship of private
ownership. Each therefore alienates a part of his private property to the
other.

The social connection or social relationship between
the two property owners is therefore that of reciprocity in alienation,
positing the relationship of alienation on both sides, or alienation
as the relationship of both property owners, whereas in simple private
property, alienation occurs only in relation to oneself, one-sidedly.

Exchange or barter is therefore the social act,
the species-act, the community, the social intercourse and integration
of men within private ownership, and therefore the external, alienated
species-act. It is just for this reason that it appears as barter.
For this reason, likewise, it is the opposite of the social relationship.

Through the reciprocal alienation or estrangement of private property,
private property, itself falls into the category of alienated
private property.[2] For, in the first place, it has
ceased to be the product of the labour of its owner, his exclusive, distinctive
personality. For he has alienated it, it has moved away from the owner
whose product it was and has acquired a personal significance for someone
whose product it is not. It has lost its personal significance for
the owner. Secondly, it has been brought into relation with another private
property, and placed on a par with the latter. Its place has been taken
by a private property of a different kind, just as it itself takes
the place of a private property of a different kind. On both sides,
therefore, private property appears as the representative of a different
kind of private property, as the equivalent of a different
natural product, and both sides are related to each other in such a way
that each represents the mode of existence of the other, and both
relate to each other as substitutes for themselves and the other.
Hence the mode of existence of private property as such has become that
of a substitute, of an equivalent. Instead of its immediate
unity with itself, it exists now only as a relation to something else.
Its mode of existence as an equivalent is no longer its specific
mode of existence. It has thus become a value, and immediately an
exchange-value. Its mode of existence as value is an alienated
designation of itself, different from its immediate
existence, external to its specific nature, a merely relative mode
of existence of this.

How this value is more precisely determined must be described
elsewhere, as also how it becomes price.

The relationship of exchange being presupposed, labour becomes
directly labour to earn a living. This relationship of alienated
labour reaches its highest point only when 1) on one side labour to
earn a living and the product of the worker have no direct relation
to his need or his function as worker, but both aspects are determined
by social combinations alien to the worker; 2) he who buys the product
is not himself a producer, but gives in exchange what someone else has
produced. In the crude form of alienated private property, barter,
each of the property owners has produced what his immediate need, his talents
and the available raw material have impelled him to make. Each, therefore,
exchanges with the other only the surplus of his production. It is true
that labour was his immediate source of subsistence, but it was
at the same time also the manifestation of his individual existence.
Through exchange his labour has become partly a source of income.
Its purpose differs now from its mode of existence. The product is produced
as value, as exchange-value, as an equivalent, and
no longer because of its direct, personal relation to the producer. The
more diverse production becomes, and therefore the more diverse the needs
become, on the one hand, and the more one-sided the activities of the producer
become, on the other hand, the more does his labour fall into the category
of labour to earn a living, until finally it has only this significance
and it becomes quite accidental and inessential whether the
relation of the producer to his product is that of immediate enjoyment
and personal need, and also whether his activity, the act of labour
itself, is for him the enjoyment of his personality and the realisation
of his natural abilities and spiritual aims.

Labour to earn a living involves: 1) estrangement and fortuitous
connection between labour and the subject who labours; 2) estrangement
and fortuitous connection between labour and the object of labour; 3) that
the worker's role is determined by social needs which, however, are alien
to him and a compulsion to which he submits out of egoistic need and necessity,
and which have for him only the significance of a means of satisfying his
dire need, just as for them he exists only as a slave of their needs; 4)
that to the worker the maintenance of his individual existence appears
to be the purpose of his activity and what he actually does is regarded
by him only as a means; that he carries on his life's activity in order
to earn means of subsistence.

Hence the greater and the more developed the social power appears
to be within the private property relationship, the more egoistic,
asocial and estranged from his own nature does man become.

Just as the mutual exchange of the products of human activity
appears as barter, as trade, so the mutual completion and exchange
of the activity itself appears as division of labour, which turns
man as far as possible into an abstract being, a machine tool, etc., and
transforms him into a spiritual and physical monster.

It is precisely the unity of human labour that is regarded
merely as division of labour, because social nature only comes into
existence as its opposite, in the form of estrangement. Division of
labour increases with civilisation.

Within the presupposition of division of labour, the product,
the material of private property, acquires for the individual more and
more the significance of an equivalent, and as he no longer exchanges
only his surplus, and the object of his production can be simply
a matter of indifference to him, so too he no longer exchanges his
product for something directly needed by him. The equivalent comes
into existence as an equivalent in money, which is now the immediate
result of labour to gain a living and the medium of exchange (see
above).

The complete domination of the estranged thing over man
has become evident in money, which is completely indifferent both
to the nature of the material, i.e., to the specific nature of the private
property, and to the personality of the property owner. What was the domination
of person over person is now the general domination of the thing
over the person, of the product over the producer. Just as the concept
of the equivalent, the value, already implied the alienation
of private property, so money is the sensuous, even objective existence
of this alienation.

Needless to say that political economy is only able
to grasp this whole development as a fact, as the outcome of fortuitous
necessity.

The separation of work from itself – separation of the worker
from the capitalist – separation of labour and capital, the original form
of which is made up of landed property and movable property....
The original determining feature of private property is monopoly; hence
when it creates a political constitution, it is that of monopoly. The perfect
monopoly is competition.

To the economist, production, consumption and, as
the mediator of both, exchange or distribution, are separate
[activities].[3] The separation of production and consumption,
of action and spirit, in different individuals and in the same individual,
is the separation of labour from its object and from itself
as something spiritual. Distribution is the power of private property
manifesting itself.

The separation of labour, capital and landed property from one
another, like that of labour from labour, of capital from capital, and
landed property from landed property, and finally the separation of labour
from wages, of capital from profit, and profit from interest, and, last
of all, of landed property from land rent, demonstrate self-estrangement
both in the form of self-estrangement and in that of mutual estrangement.

“We have next to examine the effects which take place by the attempts
of government to control the increase or diminution of money [....] When
it endeavours to keep the quantity of money less than it would be, if things
were left in freedom, it raises the value of the metal in the coin, and
renders it the interest of every body, [who can,] to convert his bullion
into money.” People “have recourse to private coining. This the government
must [...] prevent by punishment. On the other hand, were it the object
of government to keep the quantity of money greater than it would
be, if left in freedom, it would reduce the value of the metal in money,
below its value in bullion, and make it the interest of every body to melt
the coins. This, also, the government would have only one expedient for
preventing, namely, punishment. But the prospect of punishment will prevail
over the prospect of profit [, only if the profit is small].” Pp. 101,
102 (pp. 137, 138).

Section IX. “If there were two individuals one of whom owed to
the other £100, and the other owed to him £100,” instead of
paying each other this sum “all they had to do was to exchange their mutual
obligations. The case” is the same between two nations.... Hence bills
of exchange. “The use of them was recommended by a still stronger necessity
[...], because the coarse polity of those times prohibited the exportation
of the precious metals, and punished with the greatest severity any infringement ... .”
Pp. 104-05, 106 (p. 142 et seq.).

Section XI. “The inconveniencies” of paper money are ... “First,
– The failure of the parties, by whom the notes are issued, to
fulfil their engagements. Second, – Forgery. Third, – The alteration
of the value of the currency.” P. 110 (p. 149).

Section XII. “... the precious metals, are [...] that commodity
[which is the most generally bought and sold...]. Those commodities alone
can be exported, which are cheaper in the country from which they go, than
in the country to which they are sent; and that those commodities alone
can be imported, which are dearer in the country to which they come, than
in the country from which they are sent.” Accordingly it depends on the
value of the precious metals in a country whether they are imported or
exported. Pp. 128, 129 [p. 175 et seq.].

Section XIII. “When we speak of the value of the precious metal,
we mean the quantity of other things for which it will exchange.” This
relation is different in different countries and even in different parts
of the country. “We say that living is more cheap; in other words,
commodities may be purchased with a smaller quantity of money.” P. 131
[p. 177].

Section XVI. The relation between nations is like that between
merchants.... “The merchants [...] will always buy in the cheapest market,
and sell in the dearest.” P. 159 (p. 215).

IV. Consumption.

“Production, Distribution, Exchange [...] are means.
No man produces for the sale of producing [....] distribution and exchange
are only the intermediate operations [for bringing the things which have
been produced into the hands of those who are] to consume them.”
P. 177 (p. 237),

Section I. “Of Consumption, there are two species.” 1) Productive. It includes everything “expended for the sake of something to be produced” and comprise “the necessaries of the labourer....” The second class then
[...] “machinery; including tools [...], the buildings necessary for the
productive operations, and even the cattle. The third is, the material
of which the commodity to be produced must be formed, or from which it
must be derived". Pp. 178, 179 (pp. 238, 239). “[Of these three classes
of things,] it is only the second, the consumption of which is not completed
in the course of the productive operations.” P. 179 (loc. cit.).

2) Unproductive consumption. “The wages” given to a “footman” and “all consumption, which does not take place to the end that something, which may be an equivalent for it, may be produced by means of it, is unproductive
consumption". Pp. 179, 180 (p. 240). “Productive consumption is itself
a means; it is a mean to production. Unproductive consumption [...]
is not a means.” It “is the end. This or the enjoyment which is
involved in it, is the good which constituted the motive to all
the operations by which it was preceded.” P. 180 (p. 241). “By productive
consumption, nothing is lost [....] Whatever is unproductively consumed,
is lost.” P. 180 (loc. cit.). “That which is productively consumed
is always capital. This is a property of productive consumption
which deserves to be particularly remarked [....] Whatever is consumed
productively” is capital and "become capital.” P. 181 (p. [241,]
242). “The whole of what the productive powers of the country have brought
into existence in the course of a year, is called the gross annual produce.
Of this the greater part is required to replace the capital which has been
consumed [....] What remains of the gross produce, after replacing the
capital which has been consumed, is called the net produce; and is always
distributed either as profits of stock, or as rent.” Pp. 181, 182 (pp.
242, 243). “This net produce is the fund from which all addition to the
national capital is commonly made.” (loc. cit.) “... the two species of
consumption” are matched by “the two species of labour, productive
and unproductive....” P. 182 (p. 244).

Section II. “... the whole of what is annually produced, is annually
consumed; or [...] what is produced in one year, is consumed in the next.”
Either productively or unproductively. P. 184 (p. 246).

Section III. “Consumption is co-extensive with production.” “A
man produces, only because he wishes to have. If the commodity which
he produces is the commodity which he wishes to have, he stops when he
has produced as much as he wishes to have [....] When a man produces a
greater quantity [...] than he desires for himself, it can only be on one
account; namely, that he desires some other commodity, which he can obtain
in exchange for the surplus of what he himself has produced.... If a man
desires one thing, and produces another, it can only be because the thing
which he desires can be obtained by means of the thing which he produces,
and better obtained than if he had endeavoured to produce it himself. After
labour has been divided [...] each producer confines himself to some one
commodity or part of a commodity, a small portion only of what he produces
is used for his own consumption. The remainder he destines for the purpose
of supplying him with all the other commodities which he desires; and when
each man confines himself to one commodity, and exchanges what he produces
for what is produced by other people, it is found that each obtains more
of the several things which he desires, than he would have obtained had
he endeavoured to produce them all for himself.”

“In the case of the man who produces for himself, there is
no exchange. He neither offers to buy any thing, nor to sell any
thing. He has the property; he has produced it; and does not mean to part
with it. If we apply, by a sort of metaphor, the terms demand and supply
to this case, it is implied [...] that the demand and supply are exactly
proportioned to one another. As far then as regards the demand and supply
of the market, we may leave that portion of the annual produce, which each
of the owners consumes in the shape in which he produces or receives it,
altogether out of the question.” Pp. 186, 187

"In speaking here of demand and supply, it is evident that we
speak of aggregates. When we say of any particular nation, at any particular
time, that its supply is equal to its demand, we do not mean in any one
commodity, or any two commodities. We mean, that the amount of its demand
in all commodities taken together, is equal to the amount of its supply
in all commodities taken together. It may very well happen, notwithstanding
this equality in the general sum of demands and supplies, that some one
commodity or commodities may have been produced in a quantity either above
or below the demand for those particular commodities.” P. 188 (pp. 251,
252). “Two things are necessary to constitute a demand. These are
– A Wish for the commodity, and An Equivalent to give for it. A demand
means, the will to purchase, and the means of purchasing.
If either is wanting, the purchase does not take place. An equivalent is
the necessary foundation of all demand. It is in vain that a man wishes
for commodities, if he has nothing to give for them. The equivalent which
a man brings is the instrument of demand. The extent of his demand is measured
by the extent of his equivalent. The demand and the equivalent are convertible
terms, and the one may be substituted for the other. [...]
We have already seen, that every man, who produces, has a wish for other
commodities, than those which he has produced, to the extent of
all that he has produced beyond what he wishes to keep for his own consumption.
And it is evident, that whatever a man has produced and does not wish to
keep for his own consumption, is a stock which he may give in exchange
for other commodities. His will, therefore, to purchase,
and his means of purchasing – in other words, his demand, is exactly
equal to the amount of what he has produced and does not mean to consume."
Pp. 188-89 (pp. 252, 253).

With his customary cynical acumen and clarity, Mill here analyses exchange
on the basis of private property.

Man produces only in order to have – this is the
basic presupposition of private property. The aim of production is having.
And not only does production have this kind of useful aim; it has
also a selfish aim; man produces only in order to possess
for himself; the object he produces is the objectification of his immediate,
selfish need. For man himself – in a savage, barbaric condition
– therefore, the amount of his production is determined by the extent
of his immediate need, the content of which is directly the object
produced.

Under these conditions, therefore, man produces no more
than he immediately requires. The limit of his need forms the limit
of his production. Thus demand and supply exactly coincide. The extent
of his production is measured by his need. In this case no exchange
takes place, or exchange is reduced to the exchange of his labour for the
product of his labour, and this exchange is the latent form, the germ,
of real exchange.

As soon as exchange takes place, a surplus is produced beyond
the immediate limit of possession. But this surplus production does not
mean rising above selfish need. On the contrary, it is only an indirect
way of satisfying a need which finds its objectification not in this
production but in the production of someone else. Production has become
a means of gaining a living, labour to gain a living. Whereas under
the first state of affairs, therefore, need is the measure of production,
under the second state of affairs production, or rather ownership of
the product, is the measure of how far needs can be satisfied.

I have produced for myself and not for you, just as you have produced
for yourself and not for me. In itself, the result of my production has
as little connection with you as the result of your production has directly
with me. That is to say, our production is not man's production for man
as a man, i.e., it is not social production. Neither of us, therefore,
as a man stands in a relation of enjoyment to the other's product. As men,
we do not exist as far as our respective products are concerned. Hence
our exchange, too, cannot be the mediating process by which it is confirmed
that my product is [for] you, because it is an objectification
of your own nature, your need. For it is not man's nature that forms
the link between the products we make for one another. Exchange can only
set in motion, only confirm, the character of the relation
which each of us has in regard to his own product, and therefore to the
product of the other. Each of us sees in his product only the objectification
of his own selfish need, and therefore in the product of the other
the objectification of a different selfish need, independent of
him and alien to him.

As a man you have, of course, a human relation to my product:
you have need of my product. Hence it exists for you as an object
of your desire and your will. But your need, your desire, your will, are
powerless as regards my product. That means, therefore, that your human
nature, which accordingly is bound to stand in intimate relation to my
human production, is not your power over this production, your possession
of it, for it is not the specific character, not the power,
of man's nature that is recognised in my production. They [your need, your
desire, etc.] constitute rather the tie which makes you dependent
on me, because they put you in a position of dependence on my product.
Far from being the means which would give you power over
my production, they are instead the means for giving me power over
you.

When I produce more of an object than I myself can directly
use, my surplus production is cunningly calculated for your
need. It is only in appearance that I produce a surplus of this
object. In reality I produce a different object, the object of your
production, which I intend to exchange against this surplus, an exchange
which in my mind I have already completed. The social relation in
which I stand to you, my labour for your need, is therefore also a mere
semblance, and our complementing each other is likewise a mere semblance,
the basis of which is mutual plundering. The intention of plundering,
of deception, is necessarily present in the background, for since
our exchange is a selfish one, on your side as on mine, and since the selfishness
of each seeks to get the better of that of the other, we necessarily seek
to deceive each other. It is true though, that the power which I attribute
to my object over yours requires your recognition in order to become
a real power. Our mutual recognition of the respective powers of our objects,
however, is a struggle, and in a struggle the victor is the one who has
more energy, force, insight, or adroitness. If I have sufficient physical
force, I plunder you directly. If physical force cannot be used, we try
to impose on each other by bluff, and the more adroit overreaches the other.
For the totality of the relationship, it is a matter of chance who
overreaches whom. The ideal, intended overreaching takes
place on both sides, i.e., each in his own judgment has overreached the
other.

On both sides, therefore, exchange is necessarily mediated by
the object which each side produces and possesses. The ideal relationship
to the respective objects of our production is, of course, our mutual need.
But the real, true relationship, which actually occurs and
takes effect, is only the mutually exclusive possession of our respective
products. What gives your need of my article its value, worth
and effect for me is solely your object, the equivalent
of my object. Our respective products, therefore, are the means,
the mediator, the instrument, the acknowledged power
of our mutual needs. Your demand and the equivalent of your possession,
therefore, are for me terms that are equal in significance and validity,
and your demand only acquires a meaning, owing to having an effect,
when it has meaning and effect in relation to me As a mere human being
without this instrument your demand is an unsatisfied aspiration on your
part and an idea that does not exist for me. As a human being, therefore,
you stand in no relationship to my object, because I myself have
no human relationship to it. But the means is the true power
over an object and therefore we mutually regard our products as the power
of each of us over the other and over himself. That is to say, our own
product has risen up against us; it seemed to be our property, but in fact
we are its property. We ourselves are excluded from true property
because our property excludes other men.

The only intelligible language in which we converse with one another
consists of our objects in their relation to each other. We would not understand
a human language and it would remain without effect. By one side it would
be recognised and felt as being a request, an entreaty,
and therefore a humiliation, and consequently uttered with a feeling
of shame, of degradation. By the other side it would be regarded as impudence
or lunacy and rejected as such. We are to such an extent estranged
from man's essential nature that the direct language of this essential
nature seems to us a violation of human dignity, whereas the estranged
language of material values seems to be the well-justified assertion of
human dignity that is self-confident and conscious of itself.

Although in your eyes your product is an instrument, a
means, for taking possession of my product and thus for satisfying
your need; yet in my eyes it is the purpose of our exchange. For
me, you are rather the means and instrument for producing this object that
is my aim, just as conversely you stand in the same relationship to my
object. But 1) each of us actually behaves in the way he is regarded
by the other. You have actually made yourself the means, the instrument,
the producer of your own object in order to gain possession of mine;
2) your own object is for you only the sensuously perceptible covering,
the hidden shape, of my object; for its production signifies
and seeks to express the acquisition of my object. In fact,
therefore, you have become for yourself a means, an instrument
of your object, of which your desire is the servant, and you have
performed menial services in order that the object shall never again do
a favour to your desire. If then our mutual thraldom to the object at the
beginning of the process is now seen to be in reality the relationship
between master and slave, that is merely the crude
and frank expression of our essential relationship.

Our mutual value is for us the value of our mutual
objects. Hence for us man himself is mutually of no value.

Let us suppose that we had carried out production as human beings.
Each of us would have in two ways affirmed himself and the other
person. 1) In my production I would have objectified my individuality,
its specific character, and therefore enjoyed not only an individual
manifestation of my life during the activity, but also when looking
at the object I would have the individual pleasure of knowing my personality
to be objective, visible to the senses and hence a power beyond
all doubt. 2) In your enjoyment or use of my product I would have the
direct enjoyment both of being conscious of having satisfied a human
need by my work, that is, of having objectified man's essential
nature, and of having thus created an object corresponding to the need
of another man's essential nature. 3) I would have been for you
the mediator between you and the species, and therefore would become
recognised and felt by you yourself as a completion of your own essential
nature and as a necessary part of yourself, and consequently would know
myself to be confirmed both in your thought and your love. 4) In the individual
expression of my life I would have directly created your expression of
your life, and therefore in my individual activity I would have directly
confirmed and realised my true nature, my human nature,
my communal nature.

Our products would be so many mirrors in which we saw reflected our
essential nature.

This relationship would moreover be reciprocal; what occurs on
my side has also to occur on yours.

Let us review the various factors as seen in our supposition:

My work would be a free manifestation of life, hence an
enjoyment of life. Presupposing private property, my work is an
alienation of life, for I work in order to live, in order
to obtain for myself the means of life. My work is not my
life.

Secondly, the specific nature of my individuality, therefore,
would be affirmed in my labour, since the latter would be an affirmation
of my individual life. Labour therefore would be true, active
property. Presupposing private property, my individuality is alienated
to such a degree that this activity is instead hateful to
me, a torment, and rather the semblance of an activity. Hence,
too, it is only a forced activity and one imposed on me only through
an external fortuitous need, not through an inner, essential
one.

My labour can appear in my object only as what it is. It cannot
appear as something which by its nature it is not. Hence it appears
only as the expression of my loss of self and of my powerlessness
that is objective, sensuously perceptible, obvious and therefore put beyond
all doubt.[4]

NOTES

1. Translated as “Monetary System": This was a
specific belief among early Mercantilists. They contended that wealth consisted
in money itself, in building bullion reserves. It's because of this that
the export of gold or silver was not allowed, forcing active trade balances
between nations.

2. This passage reads, in the original
German: “Durch die wechselseitige Entäusserung oder Entfremdung des
Privateigentums ist das Privateignetum selbst in die Bestimmung
des entäusserten Privateigentums geraten.” It demonstrates
that, when using the terms “Entäusserung” and “Entfremdung” to denote
alienation, Marx imparted to them an identical, or nearly identical, meaning.
In all translations from early Marx, the Collected Works translates Entäusserung
as “alienation” and Entfremdung as “estrangement.” They made this decision
based on the fact that Marx would later (Theories of Surplus-Value
) directly employ the word alienation as the English equivalent of Entäusserung.

3. This refers primarily to James Mill,
who divided his system of political economy into four independent sections:
Production, Distribution, Exchange and Consumption.

4. The rest of the conspectus contains further excerpts from Mill's book. After the excerpts dealing with the
question of land rent, capital profit and wages as sources of taxation
and state revenues, Marx wrote:

“Needless to say, Mill, like Ricardo, denies that he wishes to
impress on any government the idea that land rent should be made the sole
source of taxes, since this would be a partisan measure placing an unfair
burden on a particular class of individuals. But – and this is
a momentous, insidious but – but the tax on land rent is the only tax
that is not harmful from the standpoint of political economy, hence
the only just tax from the point of view of political economy. Indeed,
the one doubt raised by political economy is rather an attraction than
a cause for apprehension, namely, that even in a country with an ordinary
number of population and or ordinary size the amount yielded by land rent
would exceed the needs of the government.”